the good, the bad, the ugly

Good
- Jason Brewer only earned 150,000 AUD in 2012

- Jane Flegg (an employee of Okap Ventures Pty Ltd) received naught for services

- Consulting costs went from circa $9.7M (WOW) to $3.3M

- Total revenue went from circa $70M to $87M, about 25% increase

- Directors fees (cash and shares) has gone from $6.3M (WOW) to $1.1M… gravy train has terminated.

- PFS cost of $3.4M in 2011, no costs associated in 2012

- Bought in coal decreased to $9.2M from $11.8M

- Borrowing (CURRENT) Convertible Notes - unsecured $1.8M, Related 3rd Party Unsecured $2.1M, Other Loans $2.5M, Working Capital Facility $0.2M

- Related party borrowings – unsecured $25.8M (SIOC-cdt BEE deal “SIOC financing would be paid pro-rata from distributions to the parent entity (74%)and SIOC (26%) and should not be viewed as a borrowing in the traditional sense from a third party financier"

- Non-current Hedge Liability $0.6M

- TOTAL BORROWINGS $46M, Less Cash and Cash Equivalents $14M, Net Debt $31M = Gearing Ratio of 14%

- Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows, Intangible assets payable: Within 1 year $34M

Bad

- Bruce Buthelezi received $4.2M termination benefits

- Don Turvey received $756,486

- Cost of Sales from $47M to $68M, mostly due to 60% mining cost increase, 100% increase for processing and circa 40% increase on export costs

- Accretion (growth) of convertible note interest $ 2.7

- Forex losses of $1.8M compared to Nil in 2011

- Depreciation of $3.2M compared to Nil in 2011

- Employee costs from $2.5M to $3.8M, attribute this to Penumbra?

- Derivative liabilities from convertible notes $0.9M

- Option and share repricing derivative liability $0.6M

- Current and Non-Current Royalty liabilities $5.2M

Ugly

- One off Royalty expense in 2012 of $8,661,536 (a financing arrangement entered into in a prior financial year)?

- Mining exploration impairment (write off) of $19,775,325, hopefully we are at a bottom on impairments

- Interest borrowing costs double to just under $6M (excluding $2.4M in coal payments to EDF)

- Borrowing (NON-CURRENT) Convertible Notes – unsecured $13.3M (maturity $6M November 2013 and $10M February 2014) Note: Balance of $16M notes is now $15.1M.

- Non-Current Differed Tax Liability $26.8M

- Non-Current Provision for Rehabilitation $12.2M

So where can was cut costs, some obvious overheads/ questions:
- Johan Heystek $440,073
- Don Turvey $756,486
- Andrew Macaulay $342,775
- James Leahy $240,521
- Depreciation of $3.2M
- Processing Costs, what happened there
- Mining exploration impairments – hopefully no more
- Interest borrowing costs – Need to bring down debts through sale of non-core assets